Fitch slaps XL with ‘negative’ outlook

Fitch Ratings Inc. on Friday revised its outlook for XL Group Ltd.’s insurance units to negative from stable, following the insurer and reinsurer’s recently announced $1.04 billion loss for the third quarter.

Chicago-based Fitch affirmed XL’s A+ financial strength rating but said “the outlook revision to negative reflects a meaningful deterioration in capitalization” following natural catastrophe losses in the third-quarter.

XL, like many insurers, announced significant claims from hurricanes Harvey, Irma and Maria, among other catastrophe losses in the quarter. XL estimates it will incur pre-tax net catastrophe losses in the third quarter of $1.48 billion.

The ratings agency added that “the negative outlook also reflects the potential for upward revisions to the company's current loss estimates, given the uncertainty in estimating losses for the recent catastrophe events, as well as the possibility of additional significant loss events occurring.”